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Yahoo Finance Plus Here Is the Tax Burden on the Poorest 20% in Every State
The U.S. has a progressive income tax system. That doesn’t refer to any sort of political influence on the system. Instead, it means that tax rates are lower for people who earn less and rise as income rises — so, ideally, those who make more carry more of the tax burden.
Currently, the federal income tax rates range from 10% to 37%. You fall into the lowest tax bracket for the 2019 filing year if you’re single and your income is $9,700 or less, or $19,400 or less if you’re married filing jointly. However, taxpayers in the lowest bracket typically don’t owe federal tax because their income is lower than the standard deduction.
But that doesn’t mean that low-income households escape paying taxes altogether. Their income might be low but not low enough to avoid federal income taxes. Plus, state and local taxes can take a bite out of limited incomes. And there are sales taxes in most states.
To find the total tax burden on the bottom 20% of taxpayers, GOBankingRates analyzed federal and state income tax rates and sales tax rates. First, GOBankingRates found the average annual income of the bottom 20% in every state using data from the U.S. Census Bureau and sourced federal and state income tax brackets from the Tax Foundation’s 2019 data. The effective and marginal tax rate on the average income of the bottom 20% in every state was then calculated for a taxpayer filing single and married filing jointly. Average sales tax paid was calculated based on consumer spending data of those in the bottom 20% from the Bureau of Labor Statistics and the Missouri Economic Research Center.
GOBankingRates then combined total spent on federal and state income tax plus total spent on sales tax annually divided by average income of the bottom 20% of earners in each state to calculate the total tax burden. The standard deduction was used when calculating income tax rates. If the standard deduction was greater than the average income, no tax would be taken from that income. Property tax was not included due to lack of consistent data for home values of the bottom 20% in every state.
States are ranked from highest to lowest average annual income of the bottom 20% of earners. The study shows that the tax burden on low-income households does vary greatly from state to state. Find out how much in taxes is paid by the bottom 20% in each state.
Last updated: Sept. 30, 2020
1. Alaska
Average income of the bottom 20%: $18,864
Single filers:
Total income and sales taxes paid: $1,060
Tax burden: 5.62%
Married couples filing jointly:
Total income and sales taxes paid: $394
Tax burden: 2.09%
Maximum income to qualify as bottom 20%: $34,114
2. New Hampshire
Average income of the bottom 20%: $18,366
Single filers:
Total income and sales taxes paid: $925
Tax burden: 5.04%
Married couples filing jointly:
Total income and sales taxes paid: $0
Tax burden: 0%
Maximum income to qualify as bottom 20%: $32,116
3. Maryland
Average income of the bottom 20%: $18,335
Single filers:
Total income and sales taxes paid: $2,218
Tax burden: 12.10%
Married couples filing jointly:
Total income and sales taxes paid: $1,365
Tax burden: 7.45%
Maximum income to qualify as bottom 20%: $34,542
Find Out: The Wildest Things Your Taxes Are Paying For
4. Utah
Average income of the bottom 20%: $18,140
Single filers:
Total income and sales taxes paid: $2,102
Tax burden: 11.58%
Married couples filing jointly:
Total income and sales taxes paid: $1,214
Tax burden: 6.69%
Maximum income to qualify as bottom 20%: $32,158
5. Hawaii
Average income of the bottom 20%: $17,148
Single filers:
Total income and sales taxes paid: $2,184
Tax burden: 12.74%
Married couples filing jointly:
Total income and sales taxes paid: $1,570
Tax burden: 9.16%
Maximum income to qualify as bottom 20%: $32,967
6. Minnesota
Average income of the bottom 20%: $16,587
Single filers:
Total income and sales taxes paid: $1,993
Tax burden: 12.01%
Married couples filing jointly:
Total income and sales taxes paid: $1,319
Tax burden: 7.95%
Maximum income to qualify as bottom 20%: $29,819
7. New Jersey
Average income of the bottom 20%: $16,332
Single filers:
Total income and sales taxes paid: $1,913
Tax burden: 11.72%
Married couples filing jointly:
Total income and sales taxes paid: $1,442
Tax burden: 8.83%
Maximum income to qualify as bottom 20%: $30,609
8. Washington
Average income of the bottom 20%: $16,329
Single filers:
Total income and sales taxes paid: $2,209
Tax burden: 13.53%
Married couples filing jointly:
Total income and sales taxes paid: $1,796
Tax burden: 11.00%
Maximum income to qualify as bottom 20%: $30,369
9. Colorado
Average income of the bottom 20%: $16,274
Single filers:
Total income and sales taxes paid: $1,986
Tax burden: 12.20%
Married couples filing jointly:
Total income and sales taxes paid: $1,391
Tax burden: 8.55%
Maximum income to qualify as bottom 20%: $30,158
10. Connecticut
Average income of the bottom 20%: $16,120
Single filers:
Total income and sales taxes paid: $1,907
Tax burden: 11.83%
Married couples filing jointly:
Total income and sales taxes paid: $1,397
Tax burden: 8.66%
Maximum income to qualify as bottom 20%: $30,330
11. Virginia
Average income of the bottom 20%: $15,860
Single filers:
Total income and sales taxes paid: $1,456
Tax burden: 9.18%
Married couples filing jointly:
Total income and sales taxes paid: $1,010
Tax burden: 6.37%
Maximum income to qualify as bottom 20%: $29,713
12. Delaware
Average income of the bottom 20%: $15,259
Single filers:
Total income and sales taxes paid: $329
Tax burden: 2.16%
Married couples filing jointly:
Total income and sales taxes paid: $0
Tax burden: 0%
Maximum income to qualify as bottom 20%: $28,421
13. Wyoming
Average income of the bottom 20%: $15,256
Single filers:
Total income and sales taxes paid: $1,263
Tax burden: 8.28%
Married couples filing jointly:
Total income and sales taxes paid: $957
Tax burden: 6.27%
Maximum income to qualify as bottom 20%: $26,895
Read: What Can I Write Off on My Taxes?
14. California
Average income of the bottom 20%: $15,015
Single filers:
Total income and sales taxes paid: $2,437
Tax burden: 16.23%
Married couples filing jointly:
Total income and sales taxes paid: $2,127
Tax burden: 14.17%
Maximum income to qualify as bottom 20%: $27,973
15. Massachusetts
Average income of the bottom 20%: $14,795
Single filers:
Total income and sales taxes paid: $1,822
Tax burden: 12.31%
Married couples filing jointly:
Total income and sales taxes paid: $1,431
Tax burden: 9.67%
Maximum income to qualify as bottom 20%: $28,449
16. Wisconsin
Average income of the bottom 20%: $14,709
Single filers:
Total income and sales taxes paid: $1,271
Tax burden: 8.64%
Married couples filing jointly:
Total income and sales taxes paid: $920
Tax burden: 6.25%
Maximum income to qualify as bottom 20%: $25,995
17. Nebraska
Average income of the bottom 20%: $14,674
Single filers:
Total income and sales taxes paid: $1,424
Tax burden: 9.71%
Married couples filing jointly:
Total income and sales taxes paid: $1,116
Tax burden: 7.61%
Maximum income to qualify as bottom 20%: $26,212
18. North Dakota
Average income of the bottom 20%: $14,491
Single filers:
Total income and sales taxes paid: $1,418
Tax burden: 9.79%
Married couples filing jointly:
Total income and sales taxes paid: $1,164
Tax burden: 8.03%
Maximum income to qualify as bottom 20%: $26,920
19. Vermont
Average income of the bottom 20%: $14,437
Single filers:
Total income and sales taxes paid: $1,561
Tax burden: 10.81%
Married couples filing jointly:
Total income and sales taxes paid: $1,262
Tax burden: 8.74%
Maximum income to qualify as bottom 20%: $25,401
20. Iowa
Average income of the bottom 20%: $14,299
Single filers:
Total income and sales taxes paid: $1,345
Tax burden: 9.40%
Married couples filing jointly:
Total income and sales taxes paid: $1,127
Tax burden: 7.88%
Maximum income to qualify as bottom 20%: $25,587
21. Kansas
Average income of the bottom 20%: $13,925
Single filers:
Total income and sales taxes paid: $1,506
Tax burden: 10.81%
Married couples filing jointly:
Total income and sales taxes paid: $1,333
Tax burden: 9.57%
Maximum income to qualify as bottom 20%: $25,384
22. South Dakota
Average income of the bottom 20%: $13,882
Single filers:
Total income and sales taxes paid: $1,253
Tax burden: 9.03%
Married couples filing jointly:
Total income and sales taxes paid: $1,085
Tax burden: 7.82%
Maximum income to qualify as bottom 20%: $25,261
23. Nevada
Average income of the bottom 20%: $13,814
Single filers:
Total income and sales taxes paid: $1,664
Tax burden: 12.04%
Married couples filing jointly:
Total income and sales taxes paid: $1,503
Tax burden: 10.88%
Maximum income to qualify as bottom 20%: $25,653
24. Oregon
Average income of the bottom 20%: $13,802
Single filers:
Total income and sales taxes paid: $240
Tax burden: 1.74%
Married couples filing jointly:
Total income and sales taxes paid: $0
Tax burden: 0%
Maximum income to qualify as bottom 20%: $25,267
25. Illinois
Average income of the bottom 20%: $13,529
Single filers:
Total income and sales taxes paid: $1,719
Tax burden: 12.71%
Married couples filing jointly:
Total income and sales taxes paid: $1,520
Tax burden: 11.24%
Maximum income to qualify as bottom 20%: $25,553
26. Texas
Average income of the bottom 20%: $13,447
Single filers:
Total income and sales taxes paid: $1,449
Tax burden: 10.77%
Married couples filing jointly:
Total income and sales taxes paid: $1,324
Tax burden: 9.84%
Maximum income to qualify as bottom 20%: $24,998
See: 5 Common Reasons You Might Owe Taxes This Year
27. Pennsylvania
Average income of the bottom 20%: $13,409
Single filers:
Total income and sales taxes paid: $1,281
Tax burden: 9.55%
Married couples filing jointly:
Total income and sales taxes paid: $1,123
Tax burden: 8.37%
Maximum income to qualify as bottom 20%: $24,513
28. Idaho
Average income of the bottom 20%: $13,120
Single filers:
Total income and sales taxes paid: $1,106
Tax burden: 8.43%
Married couples filing jointly:
Total income and sales taxes paid: $1,004
Tax burden: 7.65%
Maximum income to qualify as bottom 20%: $23,712
29. Indiana
Average income of the bottom 20%: $13,048
Single filers:
Total income and sales taxes paid: $1,227
Tax burden: 9.41%
Married couples filing jointly:
Total income and sales taxes paid: $1,115
Tax burden: 8.55%
Maximum income to qualify as bottom 20%: $23,723
30. Maine
Average income of the bottom 20%: $13,034
Single filers:
Total income and sales taxes paid: $1,264
Tax burden: 9.70%
Married couples filing jointly:
Total income and sales taxes paid: $1,133
Tax burden: 8.70%
Maximum income to qualify as bottom 20%: $22,947
Guide: How To Fill Out a W-4
31. Arizona
Average income of the bottom 20%: $12,818
Single filers:
Total income and sales taxes paid: $1,552
Tax burden: 12.11%
Married couples filing jointly:
Total income and sales taxes paid: $1,474
Tax burden: 11.50%
Maximum income to qualify as bottom 20%: $24,117
32. Montana
Average income of the bottom 20%: $12,738
Single filers:
Total income and sales taxes paid: $62
Tax burden: 0.49%
Married couples filing jointly:
Total income and sales taxes paid: $0
Tax burden: 0%
Maximum income to qualify as bottom 20%: $22,744
33. Missouri
Average income of the bottom 20%: $12,699
Single filers:
Total income and sales taxes paid: $1,330
Tax burden: 10.48%
Married couples filing jointly:
Total income and sales taxes paid: $1,280
Tax burden: 10.08%
Maximum income to qualify as bottom 20%: $22,977
34. Michigan
Average income of the bottom 20%: $12,616
Single filers:
Total income and sales taxes paid: $1,006
Tax burden: 7.97%
Married couples filing jointly:
Total income and sales taxes paid: $946
Tax burden: 7.49%
Maximum income to qualify as bottom 20%: $23,192
Check Out: 25 Most Outlandish Taxes Since the Boston Tea Party
35. New York
Average income of the bottom 20%: $12,552
Single filers:
Total income and sales taxes paid: $2,070
Tax burden: 16.49%
Married couples filing jointly:
Total income and sales taxes paid: $2,021
Tax burden: 16.10%
Maximum income to qualify as bottom 20%: $24,105
36. Rhode Island
Average income of the bottom 20%: $12,547
Single filers:
Total income and sales taxes paid: $1,505
Tax burden: 12.00%
Married couples filing jointly:
Total income and sales taxes paid: $1,457
Tax burden: 11.62%
Maximum income to qualify as bottom 20%: $23,635
37. Florida
Average income of the bottom 20%: $12,439
Single filers:
Total income and sales taxes paid: $1,243
Tax burden: 9.99%
Married couples filing jointly:
Total income and sales taxes paid: $1,219
Tax burden: 9.80%
Maximum income to qualify as bottom 20%: $22,927
38. Ohio
Average income of the bottom 20%: $12,289
Single filers:
Total income and sales taxes paid: $1,178
Tax burden: 9.59%
Married couples filing jointly:
Total income and sales taxes paid: $1,169
Tax burden: 9.51%
Maximum income to qualify as bottom 20%: $22,643
Find Out: How To Avoid Paying Taxes Legally — and the 11 Craziest Ways People Have Done It
39. North Carolina
Average income of the bottom 20%: $12,189
Single filers:
Total income and sales taxes paid: $1,161
Tax burden: 9.52%
Married couples filing jointly:
Total income and sales taxes paid: $1,161
Tax burden: 9.52%
Maximum income to qualify as bottom 20%: $22,147
40. Georgia
Average income of the bottom 20%: $12,099
Single filers:
Total income and sales taxes paid: $1,157
Tax burden: 9.56%
Married couples filing jointly:
Total income and sales taxes paid: $1,157
Tax burden: 9.56%
Maximum income to qualify as bottom 20%: $22,825
41. Oklahoma
Average income of the bottom 20%: $11,944
Single filers:
Total income and sales taxes paid: $1,352
Tax burden: 11.32%
Married couples filing jointly:
Total income and sales taxes paid: $1,352
Tax burden: 11.32%
Maximum income to qualify as bottom 20%: $21,704
42. Tennessee
Average income of the bottom 20%: $11,614
Single filers:
Total income and sales taxes paid: $1,468
Tax burden: 12.64%
Married couples filing jointly:
Total income and sales taxes paid: $1,468
Tax burden: 12.64%
Maximum income to qualify as bottom 20%: $21,282
43. South Carolina
Average income of the bottom 20%: $11,305
Single filers:
Total income and sales taxes paid: $1,246
Tax burden: 11.03%
Married couples filing jointly:
Total income and sales taxes paid: $1,246
Tax burden: 11.03%
Maximum income to qualify as bottom 20%: $21,229
44. Arkansas
Average income of the bottom 20%: $10,677
Single filers:
Total income and sales taxes paid: $1,446
Tax burden: 13.54%
Married couples filing jointly:
Total income and sales taxes paid: $1,446
Tax burden: 13.54%
Maximum income to qualify as bottom 20%: $19,400
45. Kentucky
Average income of the bottom 20%: $10,422
Single filers:
Total income and sales taxes paid: $980
Tax burden: 9.41%
Married couples filing jointly:
Total income and sales taxes paid: $980
Tax burden: 9.41%
Maximum income to qualify as bottom 20%: $19,325
46. West Virginia
Average income of the bottom 20%: $10,307
Single filers:
Total income and sales taxes paid: $1,029
Tax burden: 9.99%
Married couples filing jointly:
Total income and sales taxes paid: $1,029
Tax burden: 9.99%
Maximum income to qualify as bottom 20%: $18,559
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47. Alabama
Average income of the bottom 20%: $10,175
Single filers:
Total income and sales taxes paid: $1,442
Tax burden: 14.17%
Married couples filing jointly:
Total income and sales taxes paid: $1,442
Tax burden: 14.17%
Maximum income to qualify as bottom 20%: $18,948
48. New Mexico
Average income of the bottom 20%: $9,947
Single filers:
Total income and sales taxes paid: $1,219
Tax burden: 12.25%
Married couples filing jointly:
Total income and sales taxes paid: $1,219
Tax burden: 12.25%
Maximum income to qualify as bottom 20%: $19,037
49. Louisiana
Average income of the bottom 20%: $9,663
Single filers:
Total income and sales taxes paid: $1,554
Tax burden: 16.08%
Married couples filing jointly:
Total income and sales taxes paid: $1,554
Tax burden: 16.08%
Maximum income to qualify as bottom 20%: $18,241
50. Mississippi
Average income of the bottom 20%: $9,084
Single filers:
Total income and sales taxes paid: $1,050
Tax burden: 11.55%
Married couples filing jointly:
Total income and sales taxes paid: $1,050
Tax burden: 11.55%
Maximum income to qualify as bottom 20%: $17,049
More From GOBankingRates
Methodology: To find the tax burden on the poorest 20% in every state, GOBankingRates used the 2018 American Community Survey conducted by the U.S. Census Bureau to find the average annual income of the bottom 20% of earners in every state. GOBankingRates then sourced both the federal and state tax brackets from the Tax Foundation’s 2019 data. GOBankingRates used an in-house income tax calculator to find both the effective and marginal tax rate on the average income of the poorest 20% in every state. These calculations were done for a taxpayer filing as a single and for a married couple filing jointly. GOBankingRates then used the Bureau of Labor Statistic’s 2018 Consumer Expenditure Survey by income quintile to find the annual expenditure for the bottom 20% income quintile (minus shelter and healthcare) and found the annual expenditure of the poorest 20% in each state using the Missouri Economic Research Center’s Cost of Living Data Series. The annual expenditure of each state was then multiplied by each state’s average combined sales tax (state rate plus average local rate) to give total dollars spent on sales tax for each state. To figure out the total tax burden, GOBankingRates combined total spent on federal and state income tax plus total spent on sales tax annually divided by average income. The standard deduction was used when calculating income tax rates. If the standard deduction was greater than the average income, no tax would be taken from that income. Property tax was not included due to lack of consistent data for home values of the bottom 20% of earners in every state. All data was collected and is up to date as of Jan. 28, 2020.
This article originally appeared on GOBankingRates.com: Here Is the Tax Burden on the Poorest 20% in Every State
